Change in mindset key to Gulf Air success: Majali
Manama, August 26, 2009
Gulf Air, Bahrain’s national carrier, is passing through difficult times, having taken a major hit from the high oil prices, global downturn and severe regional competition.
Questions have arisen over the airline’s future as its mounting losses bleed the national economy. The airline, which has seen three chief executives attempt to turn its operations around since 2002, has now chosen Samer Majali, a veteran of the industry who has been credited with the successful turnaround of Royal Jordanian, to steer the ailing carrier.
Majali, speaking to TradeArabia’s Sree Bhat, expressed confidence that the airline will ride through the difficulties with the right kind of leadership and a change in the mindset of its people.
Excerpts from the interview:
You have been credited with the successful restructuring of Royal Jordanian. Do you see any similarities between the problems faced by the two airlines?
Part of my attractiveness from the point of view of Gulf Air was that this turnaround was done with an Arab carrier and an airline that was government-owned. So there are similarities, but the solutions will be different because there are major differences as well.
Jordan is surrounded by Iraq, Israel, Palestine and Lebanon and has had to contend with the political issues that affect the movement of tourists and investment into the area. That was the key challenge in turning around Royal Jordanian.
With Gulf Air, it is different in that the political issues are not so much apparent here, but competition is. We are facing severe competition from three larger cousins, who are well-established and quite well-funded. But the environment is similar at least within the company.
Gulf Air has seen many changes in the past two or three years. What is the mandate given to you by the owning company?
I have the mandate to do everything it takes to put the airline on a solid commercial footing over the next few years and to improve the product to a level that is deliverable, consistent, reliable and value for money – a product which everyone in Bahrain can be proud of.
In your opinion, what is the main problem facing Gulf Air today?
The main problem is that the airline has identical route structures to that of its competitors. It targets the same markets as all of its larger competitors and therefore it is in a position of being a follower than a leader.
The revenue is out of line with the cost. Again, it is because our route restructure is not ideal, we do not have the leadership in any of the routes. We hope Iraq and other new routes will provide Gulf Air the leadership role which we are seeking.
What is the biggest challenge faced by you?
Changing the mindset of the staff is a huge challenge. It’s easier to change the fleet and routes, but changing the attitude of staff is difficult. But we have to do that to survive. We have to convince them that this is in their best interest and that of the company.
I have come to Gulf Air alone. The airline has a great talent pool and given the right kind of leadership, I am sure we will be able to succeed.
What are the strengths of Gulf Air?
The airline has a very good inherent brand legacy, which is known globally. When we are on the positive side, this becomes a big leverage point. We also have a lot of good staff with great qualifications, experience and capabilities throughout the company. There are also some routes that are performing well.
What is the time-frame for the restructuring and when will it show results?
We have started reviewing the airline's business model and will put in place a new plan of action with a series of clear recommendations by the end of the year.
The airline will